The recent price hike on Bitcoin came to an abrupt end after the asset fell to $16,300 on Nov. 26, meaning a loss of over $3,000 in 24 hours. The fall was after Bitcoin achieved a new high of $19,480. Bitcoin’s price has continued falling as selling pressure led to the biggest loss since March.
Earlier on Nov. 26, Bitcoin hit fresh lows of $16,300 after it lost support at $17,000. The market was market by high volatility as the price gained to $16,800 shortly after and $17,200 within a few hours. The losses marked a downtrend that began overnight on Wednesday, shortly after the asset hit highs of just below $19,500.
Major exchanges such as OKEx announced an increase in withdrawals. The founder of on-chain analytics service CryptoQuant, Ki Young Ju, hinted on the increase in the outflow activity from OKEx to other exchanges as well as wallets. In a tweet, he said that BTC flows from OKEx to all other exchanges had hit 493 BTC at a time.
I think we're in scenario 3.$BTC flows from OKEx to all other exchanges hit 493 BTC at that time. 83% of total outflows went to non-exchange wallets like custody.
— Ki Young Ju 주기영 (@ki_young_ju) November 26, 2020
He said the large withdrawal numbers could be explained by different scenarios but it was most likely that they were being made to non-exchange wallets like custody, which could bring less supply to exchanges.
The CEO of Coinbase Brian Armstrong made comments on the recent rumors that the United States had plans of introducing new regulations governing self-hosted cryptocurrency wallets. The comment added additional bearish fuel to the market.
The wallets in question are non-custodial wallets which are a type of software that lets individuals store and use their own cryptocurrency as opposed to relying on a third party financial institutions.
Armstrong said that such a regulation would be impractical for many crypto users who send money to emerging markets, smart contracts in order to use Defi apps, online merchants, and in different online applications. Therefore, the additional friction would kill many of the emerging use cases for crypto, which is not just money, but digitizing every type of asset.
The confirmation of these rumors could have negative effects on the market by increasing withdrawals, since in future less people are likely to make small transactions using cryptocurrencies due to the reduction in financial privacy. Many people are not ready to upload more identifying documents online to various companies as they could be hacked and their private information stolen and used in the wrong way, which is against what crypto is about.
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